Music streaming

How Music Streaming Impacts Artists

Is Spotify where music careers go to Spoti-die?

ABIGAIL OAKLEY | PERSONAL JOURNALIST | aloakley@butler.edu

How do you listen to music? Chances are you are one of the 443 million people subscribers to music streaming services. Since streaming is often the most convenient and cheapest way to enjoy music, it’s no surprise that streaming services have taken off so quickly over the past decade.

Streaming companies have also had a big impact on the music industry as a whole, constituting 83% national income from music purchases. However, streaming is a relatively new formatand the relationship between streaming services, record labels, musical artists and listeners is still developing.

There are many benefits to this developing relationship. Since anyone can download music from streaming services like Spotify, it can make it easier for users to discover and support new artists. It can also be Easier for artists to earn a following. Streaming platforms immediately create a larger pool of potential listeners since anyone on the platform can access the music.

Mark Harris, assistant professor of music industry studies and technical facilities coordinator at Butler College of Communications, said streaming has made it easier for artists to build an audience.

“The fact that I can produce music and put it on Apple Music [or] Spotify for almost nothing makes it easier for virtually anyone to become their own record label,” said Harris.

With this new ability to be independent, many artists are turn away record companies. However, this creates new problems for artists. Without a major label supporting them, it can be harder for artists to gain exposure, and they can be exposed to bad contracts or negotiations. Harris said artists who aren’t business savvy can run into these issues.

“Anyone can be their own record label now, but that doesn’t mean they should be,” Harris said. “Artists can lose money in many ways if they don’t know how they should set up contracts [or] how they should negotiate the business aspects of managing their music.

Record labels can certainly benefit artists by providing them with resources and financial support, but this new era of streaming has also complicated the relationship between artists and record labels. Business Intern reported that Spotify pays artists around $0.0033 per stream. Then, until 80% of that revenue goes to the record label. That leaves about $0.0007 per stream for artists with record labels.

Similarly, Apple Music pays artists $0.01 per stream. After the record labels take their cut, artists earn around $0.002 per stream. It may seem advantageous to give up the record company, despite the advantages it provides.

The fact that some record companies have ownership shares in streaming services complicates their relationship with artists. Low pay-per-stream doesn’t hurt record labels as much as it hurts artists, because record labels make more money from stock than from pay-per-stream. A lower pay-per-stream benefits them because they get direct profit from the streaming services.

Brandon Esteva, a sophomore in music industry studies and a double major in strategic communications, said record companies can also hurt artists.

“I think it’s more the record companies that really hurt artists,” Esteva said. “The label owns the rights to the artist’s music, so they take a cut of that $0.0033… Artists have less control over their music, and labels are usually a big reason for that.”

Since the average consumer may not be aware of the hidden aspects of streaming, streaming services often seem to support artists more substantially, despite the low pay-per-stream. Erika Wiseman, a second-year elementary school student, said she thinks streaming services encourage support for artists.

“It connects their merchandise, upcoming gigs, etc.” Wiseman said. “And [it] gives listeners easy access to almost all of their discography.

Streaming services provide these resources to support artists, but the majority of people won’t use them. In 2019, Taylor Swift Reputation tour had around 2.28 million attendeeswhile this album had 55 million streams in its first 24 hours. It may not be shocking that more people listen to her music than attend concerts, but those numbers have an impact on how Swift generates revenue.

Before streaming, the music industry worked very differently. According to a Forbes article, the typical royalty rate for physical albums is between 9-12%. This rate could rise with the success of the artist. It was easier for artists to make a profit since physical album sales accounted for almost all recorded music revenue until the mid-2000s, as stated by the Recording Industry Association of America US Sales Database.

While many might agree that the music industry needs to address these issues and work for the benefit of artists, paid subscriptions to these services still accounted for 57% recorded music revenue in 2021. This means that, despite dissatisfaction with streaming services, more than half of recorded music revenue still comes from subscriptions to these services.

Even with their issues, streaming services aren’t going away anytime soon. This is probably due to their convenience, low cost and user experience. Wiseman uses streaming services because of their simple and efficient interfaces.

“It’s really easy to use, and it’s kind of tailored to its user,” Wiseman said. “Everything I like will be available and ready to play every time I open the app.”

Playlists are an important aspect of this user experience. Spotify regularly pushes playlists over albums, according to a post by HighVolMusic.

Companies like McDonald’s and Nike often use playlists as part of their advertising by using playlists with popular music related to their brand and posting them on social media. When using playlists, businesses can avoid paying royalties to artists. Instead, companies are advised not to use more than one song from a particular artist so that it doesn’t appear that the artist endorses that company. However, companies are not required to notify artists, so their songs may still end up on these playlists without their consent or knowledge.

These issues can lead people to ask: how can artists generate income? The most important sources of income come from money paid directly to the artist. Buying physical albums like CDs or vinyl records, going to concerts, and purchasing merchandise directly from their concerts or websites are the most common ways to do this.

Switch to streaming services like Tidewhich pays artists $0.01284 per stream or band camp, which forces users to buy music and gives listeners the option to pay a higher price, can also be a better source of income. Artists are also supported through non-monetary methods such as posting and sharing about them on social media. This helps artists gain listeners and recognition.

As people continue to understand the controversies over popular streaming services and low pay per stream, artists and subscribers are leave these platforms in favor of services like Tidal or Bandcamp. Streaming services like Spotify and Apple Music might have to change to stay in business. There are no clear answers yet. The relationship between streaming services, record labels and artists is complicated. While individuals can’t change the entire industry, there are small steps people can take to support the artists they love.


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